After final separation or divorce it is necessary, and often desirable, for parties to divide their assets and liabilities. This is known as a “property settlement”.
Parties who were married, or de facto partners who separated after 1 March 2009, are able to apply to the Court to decide what the property settlement should be.
A property settlement can deal with a range of financial matters including;
- The distribution of property
- Spousal maintenance
- Child Support
What amount should I receive?
Whilst our goal is to help you attain the best divorce property settlement with your spouse or partner without recourse to the cost of litigation, it may assist you to understand the property settlement process and considerations the Court undertakes when determining property matters, as this is the same analysis used by lawyers when seeking to negotiate a fair property settlement.
The Family Court is authorised to make such Orders as it considers are appropriate adjusting the property interests of either party. Whilst the guidelines set out below are not intended to be exhaustive, and each case will be determined having regard to its specific circumstances.
In general terms, the Court undertakes a consideration of the contributions made by the parties to the acquisition, maintenance or improvement of property during the marriage or relationship, together with an assessment of each party’s future needs, to determine an appropriate division of the property pool.
Step 1: Assets, liabilities and financial resources.
The Court will generally afford any party who brings greater assets or financial resources into the relationship with a credit in terms of an initial contribution. The relative value of that initial contribution to a final property division after separation will not necessarily be “dollar for dollar” but will be affected by a number of factors including the duration of the marriage, the nature of the asset or financial resource, and any subsequent contributions made by the other party to that asset or financial resource.
The property pool available for distribution must also be calculated.
Step 2: A consideration of the contributions of the parties.
In determining an appropriate property division the Court also takes into account the contributions of the parties to the assets and liabilities which exist at the time of separation, and at the time of any trial. There are three different types of contributions namely;
- Direct financial contributions towards the acquisition, conservation or improvement of property. An example would be income earned by either party during the relationship, or if one party came into the relationship with a significant interest in real estate.
- Indirect financial contributions towards the acquisition, conservation or improvement of an asset. An example of this type of contribution would be if one or both parties undertook renovations of a property which resulted in an increase in the value of the property.
- Non-financial contributions. This type of contribution is those made by a party to the welfare of the family. Parties who act as the primary homemaker, carers of children, and who undertake domestic responsibilities are credited with this type of contribution.
Step 3: Future needs.
The Court will also consider a range of factors relating to the future needs of the parties, including but not limited to;
- The effect of any proposed Order on the earning capacity of either party.
- The age and health of each party.
- Each party’s prospect of future gainful employment and income earning capacity.
- Whether either party has an obligation to support a child of the marriage or other dependent.
Having considered the above, the Court also has the overriding obligation to ensure that any property division is just and equitable in all the circumstances.
It is not necessary to wait until such time as you are divorced to finalise a property settlement. Rather, arrangements to finalise all property matters between parties can be made at any time after final separation. It is important to note however that if you do obtain a divorce, any application to the Court seeking Orders for the division of property must be made within 12 months of the divorce becoming absolute, or at a later date in certain circumstances with leave of the Court.
There are obvious and significant benefits to you in avoiding the costs and stress of litigious Family Court proceedings, and we consider the interests of the parties can be promoted by a timely negotiated resolution of property matters post-separation.